Energy and energy policy in Turkey

As is the case all over the world, energy and energy policy in our country significantly affect key factors such as economic stability, employment, development, borrowing, inflation, foreign exchange, current account deficit, and interest rates. The recent imperialist attack on and war in Iran have once again demonstrated that the importance of energy and energy policy is at a vital level.

Turkey's foreign dependency in energy is quite high. According to the latest data from the Ministry of Energy and Natural Resources, Turkey's foreign dependency rate is at the 67.8% level. The foreign dependency rate in natural gas is over 98%, and it is around 90% in oil. Approximately 65 billion dollars are spent annually on energy imports. The increase in energy prices due to the war is affecting our economy in many ways.

According to the calculations of the Central Bank of the Republic of Turkey, every 10-dollar increase in oil prices raises inflation by 1.6%. Unfortunately, the program to reduce inflation is suffering serious damage from these increases. If the war continues, the probability of meeting the year-end target is weakening.

Again, a 10-dollar increase in oil prices causes the current account deficit to rise by approximately 2.5 billion dollars. This situation also leads to a decrease in the reserves of the Central Bank, which does not want the exchange rate to rise.

The increase in energy costs reduces the short-term competitiveness of exporters in our country, and cost pressure causes exports to fall.

When all these are evaluated together, concrete measures must be taken against supply-side shocks in energy policies, and these measures must be strictly followed.

The challenges posed by imperialism, especially toward developing countries, and its pursuit of policies that amount to war and occupation, have brought about serious transformations in the national policies of these countries. It is observed that Turkey maintains its policies that prioritize energy supply security due to the pressure created by its increasing energy demand. At the same time, emphasis has been placed on transforming the structure dependent on fossil fuels in line with the understanding of sustainable development.

In order to eliminate the threats posed by our country's high import dependency and fossil fuel reliance in terms of energy security, energy transition processes based on national resources have been brought to the forefront. Turkey ranks among the top six countries in the world in terms of renewable energy. However, it is not utilizing its existing potential sufficiently.

When looking at Turkey's energy policies from a historical perspective, it is seen that these policies are largely aimed at ensuring supply security. Against the threats created by dependence on fossil fuels and imports, the orientation toward domestic and renewable energy sources has increased, and the element of sustainability has come to the fore.

The cornerstones of our country's energy policies are ensuring energy efficiency, strengthening energy security, and reducing foreign dependency in energy. In addition, it is necessary to attach importance to the processing of rare earth elements, especially boron, and to nuclear energy studies.

Initiatives aimed at nuclear energy studies and the processing of boron and other rare earth elements to close Turkey's energy gap are among the elements that determine the direction of energy policy.

Turkey must reduce foreign dependency within the scope of its energy policies, increase energy efficiency, and produce added value by extracting and processing strategic elements such as boron and uranium. Furthermore, renewable energy sources must be utilized effectively.

Solving the problem of foreign dependency in energy will also make significant contributions to the resolution of fundamental economic problems such as inflation, current account deficit, borrowing, and development.

Prof. Dr. Duran Bülbül